Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow turned positive compared to a year ago, driven by higher operating cash flow despite increased capital spending. Sequentially, free cash flow decreased significantly as operating cash flow declined while revenue also fell.
- Revenue supported operating cash flow, but capital expenditure consumed a large portion of that cash flow, leaving free cash flow at a very thin margin.
- Compared to the prior quarter, revenue and operating cash flow were lower, resulting in a lower free cash flow and a weakened margin. Compared to the same quarter last year, revenue was higher and operating cash flow was positive versus negative, leading to improved free cash flow and a positive margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$19.5B
Trailing twelve-month free cash flow.
Quarter free cash flow
$204.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$4.6B
Cash generated by operations before capital spending.
CapEx
$4.4B
Capital spending and related asset purchases.
FCF margin
0.1%
The share of revenue converted into free cash flow.
Cash flow trend
A short quarterly history shows whether FCF is scaling with revenue or only spiking for one period.
| Period | Revenue | Operating CF | CapEx | FCF | FCF margin |
|---|---|---|---|---|---|
| 2022-07-31 | $151.4B | $13.0B | $4.0B | $9.0B | 6.0% |
| 2022-10-31 | $151.5B | $6.5B | $4.6B | $1.9B | 1.2% |
| 2023-01-31 | $162.7B | $13.1B | $4.8B | $8.3B | 5.1% |
| 2023-04-30 | $151.0B | $4.6B | $4.4B | $204.0M | 0.1% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 10.8% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.9% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$31.5B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Operating cash flow recovery
Operating cash flow improved from negative a year ago to positive this quarter, alongside higher revenue. This shift was the primary factor behind the change in free cash flow.
Free cash flow moved from negative to positive, strengthening the cash position year-over-year.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue supported operating cash flow, but capital expenditure consumed a large portion of that cash flow, leaving free cash flow at a very thin margin.
Compared to the prior quarter, revenue and operating cash flow were lower, resulting in a lower free cash flow and a weakened margin. Compared to the same quarter last year, revenue was higher and operating cash flow was positive versus negative, leading to improved free cash flow and a positive margin.
Monitor the free cash flow margin, which has turned positive but remains very low relative to revenue.